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International sharing: envisioning a new economy

The purely market-based approach to development has failed the world's poor. If the global economy is to serve the interests of all people, it must be primarily geared towards securing basic human needs in perpetuity, founded upon a genuine form of multilateral cooperation and economic sharing.

Summary

Despite ongoing development efforts since the foundation of the United Nations, the international community has failed to end global poverty or prevent environmental degradation. More than half the world still struggles without sufficient access to staple food, clean water, adequate shelter or essential healthcare. The policies that drive the global economy have also magnified the gap between rich and poor, led to conflict over the planet's natural resources, and resulted in an ecological crisis that threatens life on earth.

A comprehensive vision for how to create a fair and sustainable world is urgently needed. Nation states must move beyond the obsession with purely market-based economics, and embrace an alternative approach to managing the world's resources based upon the principles of sharing and cooperation.

A crucial first step is for governments to implement an international program of emergency relief to rapidly eliminate hunger and unnecessary deprivation. This should be followed by longer-term reforms to the global economy to ensure its systems and institutions operate in an equitable and sustainable manner that secures basic human needs for all.

Alongside reforms to world trade, global finance and the activities and influence of multinational corporations, regional and international agreements can ensure universal access to commonly-held natural resources such as water, energy and the atmosphere. Through the United Nations and its agencies, the international community has the means to ensure that every nation can provide access to essential services such as education, healthcare and utilities for all their citizens. Agricultural systems can also be transformed in line with the evidence that small-scale, low input, multi-crop farming can ensure universal food security.

At this critical juncture in human history, only a united global public can pressure governments to reorder their distorted priorities, cooperate more effectively, and share the resources of the world more equitably.

International sharing: envisioning a new economy

The global financial meltdown of 2008 and its aftermath is just one of a long series of interrelated crises that have combined to leave billions of people in the Global South without access to the basic necessities of life. As the devastating costs of climate change and financial turmoil continue to unfold, it is no longer possible to ignore the urgent need for transforming our social, political and economic structures along more just and sustainable lines. A vision of an equitable and peaceful world must be based on a clear understanding of the interdependence of all nations and the structural causes of poverty, inequality and climate change. The task ahead is unprecedented and formidable, requiring a radical transformation of the global economy, but this is the only way to co-create a more peaceful and harmonious world without insecurity or deprivation.

Despite rapid advancements in standards of living for a large proportion of the world population in recent decades, an unacceptable number of people are denied access to the basic necessities of life. The incidence of hunger is more widespread than ever before, surpassing 1 billion people in 2009 despite the record harvests reaped in recent years.[1] Whilst the proportion of the population living on less than $1.25 a day declined between 1981 and 2005 according to World Bank figures, the number of people living in extreme poverty across South Asia and sub-Saharan Africa has continued to increase. At least 1.4 billion people in developing countries lived in extreme poverty even before the ongoing crisis of food and energy price inflation, a number equivalent to more than four times the population of the United States.[2] Almost a billion people have no access to clean drinking water, and 2.6 billion people - half the developing world - lack adequate sanitation.[3] Every year, about 100 million people are pushed into poverty as a result of paying for healthcare services.[4] Every day, around 50,000 people die needlessly of poverty-related causes, half of whom are young children.[5]

The current system of overseas development assistance (ODA) has largely failed to enable governments to secure the basic needs of all people. A major proportion of aid donated to poor countries remains tied to political, ideological and commercial interests that benefit the donor countries.[6] Of the ‘real aid' that contributes to improving the lives of poor people, the aggregate amount donated is far from commensurate with urgent needs. The international aid target of 0.7 percent of rich countries' gross national income (GNI) has never been met since it was first conceived 40 years ago - donations currently average a mere 0.32 percent having previously descended to an historic low in the 1990s.[7] The Millennium Development Goal of halving the proportion of hunger and extreme poverty, even if reached by 2015, will still leave hundreds of millions of people in a state of undernourishment and deprivation.

Although there is abundant evidence that aid can help improve poor people's lives, most of the ODA delivered today addresses the symptoms of poverty and underdevelopment whilst ignoring its deeper causes. Without a transformation of goals and priorities by the major powers and the institutions that govern the global economy, any benefits from foreign aid will be negated by the unjust arrangements of the international economic and financial system. Far more finance continues to flow from poor to rich countries in debt servicing, capital flight and tax evasion than is received in development assistance.[8] In the longer term, a truly sustainable and equitable form of development must come from within developing countries and cannot be dependent upon external help, requiring a fundamental shift of power in favour of the poorest groups and most disadvantaged nations.

Systemic barriers to progress

Comprehensive solutions that address the structural causes of poverty and inequality are often dismissed by policymakers in the North as ‘unrealistic' given the political and economic realities they face, despite being passionately advocated by civil society organisations around the world. Incremental improvements and attempts to ‘chip away' at urgent global issues like climate change, unfair trade and Third World debt are the mainstay of international policy discussions, even though progress remains painfully slow. A central barrier to more thorough reform of the imbalanced global financial and trade system is the pro-market ideology that has firmly established itself as best practice amongst mainstream economists and policymakers since the early 1980s.

The consequent unwillingness of governments to regulate the power and influence of big business has become entrenched over the period of economic globalisation - a time in which transnational corporations have extended their reach beyond national jurisdictions whilst amassing greater financial strength than that of many sovereign states.[9] This is most notable in the United States where billions are spent each year by corporate lobbyists to influence political outcomes, a phenomenon that is replicated at the European Union and during negotiations at the World Trade Organisation.[10] Over several decades, and particularly with the use of increasingly sophisticated methods of advertising, public policy under the influence of corporations has progressively fashioned a world economy that is structurally dependent upon unsustainable levels of production and consumption for its continued success.

A key dynamic of market-driven politics is to transfer control of the economy from the public to the private sector. Just as common land was progressively ‘enclosed' in the Middle Ages, other shared resources such as seeds, information and technology are increasingly privatised and controlled by multinational corporations.[11] International rules are put in place (enforced by the World Trade Organisation) to help maintain this market-based system that encourages private ownership over public resources in order to profit from their use and exploitation. In a similar way, it is now commonplace for healthcare, education and water to be provided by private companies, making such basic services and utilities inaccessible to those who cannot afford them.[12] Staple foods, traditionally grown for personal and local consumption, are now highly commoditised and often priced out of reach for those without sufficient purchasing power, leading to rising levels of hunger, food price crises and civil unrest in many low-income countries.[13]

Multilateral institutions like the World Bank and International Monetary Fund continue to promote policies that increase global inequality, even though the myth that economic growth will eventually benefit all has long been shattered.[14] As we also know, endless growth is unsustainable on a planet with finite resources.[15] This impasse is further compounded by ecological degradation and climate change - the side-effects of economic ‘progress' that disproportionately affect the poorest people who are least to blame for causing these multiple crises.

The purely market-based approach to development has consistently failed to secure basic needs for the majority of the world's poor. Alternative mechanisms must ensure that the poorest people are guaranteed immediate access to the essentials of life as a human right. Given the interdependency of nations and the uneven distribution of the world's natural resources and economic power, this presents a huge challenge for the international community to develop more inclusive systems of global governance guided by the principle of sharing.

Global interdependence

The multiple crises that confront the world are urging nations to acknowledge our global interdependence, and to accept that humankind is part of an extended family that shares the same basic needs and rights. This holistic understanding of our relationship to each other and the planet transcends nations and cultures, and builds on ethics and values common to faith groups around the world. It also reflects the strong sense of solidarity and internationalism which lies at the heart of the global justice movement.

The first true political expression of our global unity was embodied in the establishment of the United Nations. Since then, international laws have been devised to help govern relationships between nations and uphold human rights. Cross-border issues such as climate change, global poverty and conflict are uniting world public opinion and compelling governments to cooperate and plan for our collective future. The globalisation of knowledge and cultures, and the ease with which we can communicate and travel around the world, has further served to unite diverse people in distant countries. But our global interdependence is still not sufficiently expressed in our political and economic structures. This cannot be achieved until nations cooperate more effectively, share their natural and economic resources, and ensure that global governance mechanisms reflect and directly support our common needs and rights.

A more inclusive international framework urgently needs to be established through the United Nations (UN) and its agencies. Although in need of being significantly reformed and strengthened, the UN is the only international body with the necessary experience, resources and universal membership to coordinate the process of restructuring the world economy.[16] The UN Charter and Universal Declaration of Human Rights have been adopted by all member states and embody some of the highest ideals expressed by humanity. If the UN is rendered more democratic and entrusted with more authority, it would be in a position to foster the growing sense of community between nations and harmonise global economic relationships.

International emergency redistribution

For over 60 years, the international community has pledged itself to the Universal Declaration of Human Rights, which stipulates that: "Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing, medical care and necessary social services..."[17] Yet despite numerous global conferences and international commitments in the post-war era, there has never been a sufficient programme of action implemented on a global scale that can secure these economic and social rights for all people.

If humanity is ever to conquer the worst incidences of poverty in the world, the only remaining option is united action on an unprecedented scale based on international redistribution and cooperation between nations. This first requires a new understanding of what constitutes a humanitarian crisis beyond the existing definitions related to natural disasters and conflict, and must include any person who exists in a life-threatening condition of poverty. An unprecedented response to the needless destitution and hunger should be coordinated and led by a United Nations emergency relief program for the millions of people who lack secure access to basic food, clean water, essential healthcare and shelter.

Although an emergency response of this kind will not address the structural causes of poverty and inequality, the prevention of up to 50,000 poverty-related deaths each day is sufficient reason for such a program to be prioritised above all other international concerns. Since restructuring the global economy and its institutions requires a lengthy process of negotiation and reform, an emergency transfer of resources to the poorer areas of the world is the only practical way for governments to eliminate hunger and extreme deprivation within a short number of years.

At first, the responsibility for mobilising the needed resources for such a program will rest with the governments of high-income nations. These nations must proceed in a spirit of altruism, and any resources distributed must be free of all conditions that favour donor countries. As already happens during emergency relief operations, essential provisions should be provided in a way that respects the needs of individual communities and encourages their engagement with the program. This would decrease the possibility of corruption by political, economic or commercial interests, which remains a common problem with the current system of overseas aid and large-scale development initiatives.

The ongoing efforts of numerous UN organisations and international relief agencies demonstrate the feasibility of implementing an emergency program if sufficient financial and technical resources are mobilised. As revealed by the recent bail-outs of failed banking institutions and the ongoing rescue packages provided to indebted European states, governments have the ability to raise vast sums when considered necessary. In addition to redirecting existing streams of overseas development assistance, widely discussed sources of funding for humanitarian purposes include various global taxes, the use of IMF gold and reserve assets, the closure of tax loopholes, and the redirection of military spending.[18] The international community has never before had such ample resources and technical ability to eliminate hunger and mass poverty; all that is required is a sufficient degree of international cooperation and the political will to act.

A similar initiative to transfer essential resources from ‘North to South' was first proposed in 1980 by the Independent Commission on International Development Issues (the Brandt Report) but, despite unprecedented interest from the global public, the necessary leadership to implement an emergency program was lacking.[19] Humanity cannot afford this level of complacency again; not to act is to condemn millions of people to needless suffering and death.

Global economic reform

Alongside an international emergency relief effort, a longer term program should be initiated to redirect international development assistance and other resources towards reforming the structures and institutions of the global economy. These reforms should embody a new paradigm for economic development geared to enabling all governments to safeguard the basic economic and social rights of every citizen, whilst also establishing new international arrangements to sustainably manage the planet's natural resources.

All of the industrialised countries already share resources nationally through systems of welfare and the provision of essential public services. By redistributing public revenues, state welfare systems provide education, healthcare, housing and social security as a basic human right. Yet the basic welfare taken for granted by people in developed countries is still a dream for the majority of the world's population. As recently promoted by a United Nations initiative [see Box 1], state-based systems of social protection can play a significant role in securing ongoing access to essential goods and services. The International Labour Organisation (ILO) and other UN agencies regard a minimum level of social protection as an important forerunner in the establishment of more comprehensive systems of welfare in the Global South.

Box 1: Achieving universal social protection through redistribution

The goal of delivering social protection in all countries through basic old age and disability pensions, child benefits, employment programs, and provision of social services was adopted in April 2009 by the United Nations System Chief Executives Board (CEB) as one of its nine key priorities to cope with the global economic crisis.[20] The Social Protection Floor Initiative (SPF-I), led by the International Labour Organisation (ILO) and the World Health Organisation (WHO), sets out two broad elements to achieve this goal:

a) A basic set of essential social rights and transfers, in cash and in kind, to provide a minimum income and livelihood security for all and to facilitate effective demand for and access to essential goods and services.

b) The supply of an essential level of goods and social services such as health, water and sanitation, education, food, housing, life and asset-saving information that are accessible for all.[21]

The stark inequality in social provision between countries is made plain in The World Social Security Report 2010/11, the first in a series of reports by the ILO on social security coverage in different parts of the world. The world as a whole spends 17 percent of GDP on social protection, but that is 19 percent in the developed world and only around 4 percent in developing countries.[22] The report also notes that nearly one-third of the world's population has no access to any health facilities or services at all, even though a larger percentage of people have access to healthcare than to various cash benefits.[23]

On the questions of cost and funding, actuaries at the ILO have demonstrated that less than 2 percent of global GDP is required to provide a basic set of social protection benefits to all people that have to live on less than $1-a-day. Even in the poorest countries of sub-Saharan Africa, Asia and Latin America, evidence suggests that a minimum package of social security benefits is affordable.[24] Michael Cichon, Director of the Social Security Department in the ILO, states that investing in a basic set of social security benefits most likely will cost nothing in the longer term, as modest schemes should pay for themselves by the productivity increases that they can trigger.[25]

In the longer term, the ILO upholds the concept of state-organised welfare systems based on the principles of solidarity and progressive universalism, stating that a global social floor is only a first step along the way of building higher levels of social security. Based on that floor, the ILO argues that more comprehensive social protection mechanisms should be sought as economies develop and as the fiscal space for redistributive policies widens. The most fundamental task, it states, is to develop comprehensive social security systems in those low-income countries where only rudimentary systems exist so far, beginning with the provision of basic income security and affordable access to essential healthcare. Alongside this urgent need, the ILO also stresses the importance of providing support to existing social security systems in developed as well as developing nations.[26]

If given sufficient support from donor nations, UN agencies could significantly increase the level of assistance offered to governments in less developed countries for implementing nationwide welfare programs. Whilst this would require a substantial redistribution of resources from North to South in the short term, such a program would gradually reduce dependency on international emergency assistance in less developed countries. The development of local economies and more progressive taxation policies are among the measures that can strengthen public revenues and help maintain welfare services in the longer term.

Many basic goods and services that are essential for life and health can be made universally accessible through more effective public services, which should replace private sector alternatives that the poor often cannot afford. A number of UN agencies are well equipped with the necessary expertise and capacity to assist in this process. For example, the World Health Organisation and the United Nations Educational, Scientific and Cultural Organization (UNESCO) could assist states in establishing universal public healthcare and education systems. It is similarly possible for multilateral agencies to promote access to essential utilities by, for example, establishing renewable energy, water and sanitation infrastructure and services.

At the national level, legal and structural reforms could ensure that land is made available for small-scale agriculture and public housing programs. In particular, staple food can be grown locally by smallholder and family farmers to help ensure food security, without the emphasis on maximum profit and scale that is the overriding objective of industrial agriculture.[27] UN agencies such as the World Food Program and the Food and Agriculture Organisation are in a position to support such programs by redistributing the resources required to build capacity for local food security. Similar reforms are necessary to provide resources for building adequate shelter for the poor in both rural and urban areas, especially for the millions of people living in the slums of rapidly-urbanising cities.[28] Strengthening local economies in this way is a valuable tool for redistributing economic activity back into towns and villages, and assistance from governments should be provided to re-establish local industries that supply goods and services to the community.[29]

At the international level, additional reforms that enable nations to more equitably share the world's natural resources would support the transition to a more sustainable global economy. Water, seeds, oil, gas, forests, minerals and even the atmosphere are all forms of ‘global commons' that can be managed in the interest of all nations, whilst respecting biodiversity and the environmental limits to economic growth. One option is to ensure that such resources are recognised as a shared commons and protected through a trust or similar international mechanism.[30] If such an agreement is negotiated between nations or through a global body (such as a new United Nations agency), a shared resource could be managed in the interests of all citizens, protected from exploitation by the private sector, and managed in an environmentally sustainable manner that preserves it for future generations. [See Box 2].

Box 2: International agreements to share natural resources

There are a number of existing examples of natural resources being shared by governments both regionally and globally. International agreements include the Antarctic Treaty System, and UN conventions on the use of international waters, the governance of outer space and celestial bodies such as the moon. More recently, there has been some progress in agreeing fairer access to and benefit sharing of genetic resources. Regional agreements on sharing transnational sources of water also exist, such as The Convention on the Law of Non-Navigational Uses of International Watercourses, as well as a number of agreements between specific nations sharing water across national boundaries. Increasing demands on limited natural resources requires that such agreements become more commonplace and cover a wider range of common resources. International agreements of this nature have the potential to ensure that natural resources are managed more sustainably, access and benefits are more equitably shared across society, and violent conflict over control and access to them is prevented.

The economic reforms outlined above will have significant implications for existing development policies and institutions, both nationally and globally. They will require a significant rethink of Western notions of ‘development', a more holistic vision of humanity's relationship to the natural environment, and alternatives to financial measures like Gross Domestic Product and income per capita as the main yardsticks for national and social progress.[31] The inevitable consequence of such a shift in policy is a significant reform of existing mechanisms of international trade, finance and development aid; the cancellation of unsustainable debt burdens; the rolling back of privatisation and the intellectual property rights regime; and a major restructuring or decommissioning of existing international institutions such as the International Monetary Fund, World Bank and World Trade Organisation.

The establishment and governance of a fairer international economic order should be coordinated by a reformed, democratic and more effective UN system. In all cases, developing countries should no longer be required to restructure their economies as a condition of development assistance, and must instead retain sovereign control over their domestic policies. If the global economy is to serve the interests of all people, it must be primarily geared towards securing basic human needs in perpetuity, founded upon a genuine form of multilateral cooperation and economic sharing.

The global call for justice

Most of the proposals outlined in this paper are far removed from mainstream policy discussions taking place around the world. Despite the increasingly urgent need for change, policymakers - particularly in wealthy countries - seem unwilling to re-examine their outdated assumptions about how the economy should work. Progressive ideas are rejected and agreements to cut CO2 emissions, negotiate fairer trade rules or reduce military armaments all fail to achieve the desired goals. Time is running out - more than half the world is suffering in abject poverty, the threat of global terrorism and war continues to escalate, and we are edging ever closer to irreversible environmental damage.

As world leaders seek to resurrect the old economic order, millions of people are calling for a better world that ensures all people live in dignity, with the basics guaranteed. Social movements in every country are campaigning for justice and a more humane form of development, one that protects the vulnerable, sustains the environment and promotes peaceful international relations.[32] Campaigners have long protested against the diktats of those international financial institutions that favour the wealthiest nations, enforce an unjust global trading system and allow the richest societies to benefit from the debt burdens of poorer countries. They condemn the activities of large corporations that dominate the policy-making process, externalise costs, and promote greed and wasteful consumerism. They envisage a more inclusive world order in which people live productive and fulfilling lives, where local communities flourish, and where nations cooperate for the global common good.[33]

This growing, diverse movement identifies its interests with global society as a whole and not just the citizens of any one nation. Through utilising the communications revolution and adopting collective forms of spontaneous action across national borders, it is considered by many to be the new superpower in world affairs.[34] Recent events in the Middle East and North Africa act as a crucial reminder that, when fused and directed, public opinion has the potential to influence government decisions through its demands for fundamental, far-reaching change. The prevailing hope for achieving decisive action on urgent global issues is the formation of a transnational civil society movement with the power to persuade governments to rapidly change their distorted priorities. A unifying demand of the public must be to share the world's resources more equitably in order to end unnecessary deprivation, live within environmental limits and secure basic human rights for all.

Such a movement is still in its infancy and its voice remains uncoordinated, but it remains up to the people of goodwill in every nation to identify and unite around common themes, and to influence policymaking at every opportunity. There is no justifiable excuse for world leaders to continue with business as usual: under a broad coalition of civil society, the time to act is now.

Notes:

[1] Food and Agriculture Organisation of the United Nations (FAO). 1.02 billion people hungry: One sixth of humanity undernourished - more than ever before [online] (Rome, 19th June 2009)www.fao.org/news/story/en/item/20568/icode/

[2] Chen, Shaohua & Ravallion, Martin. The Developing World Is Poorer Than We Thought, But No Less Successful in the Fight against Poverty (The World Bank Development Research Group, Washington DC, August 2008).

[5] United Nations Department of Public Information. Secretary-General calls for political will "to end the scourge of poverty once and for all", in remarks at international event [online] (New York, 17th October 2007)www.un.org/News/Press/docs/2007/sgsm11226.doc.htm

[9] Anderson, Sarah and Cavanagh, John. Top 200: The Rise of Corporate Global Power (Institute for Policy Studies, December 2000).

[10] Deckwirth, Christina, The EU Corporate Trade Agenda: The role and the interests of corporations and their lobby groups in trade policy-making in the European Union (Brussels/Berlin: Seattle to Brussels network, November 2005).

[30] There are a number of notable proposals for resource trusts currently under discussion. For example, see Barnes, Peter, Capitalism 3.0: A Guide To Reclaiming The Commons (Berrett-Koehler, 2006); Ostrom, Elinor, Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge University Press, 1990); Brown, Peter & Garver, Geoffrey, Right Relationship: Building a Whole Earth Economy(Berrett-Koehler, 2009).

[31] See Stiglitz, Joseph et al. Report by the Commission on the Measurement of Economic Performance and Social Progress (CMEPSP, 14th September 2009)

[32] Maeckelbergh, Marianne. The Will of the Many: How the Alterglobalisation Movement is Changing the Face of Democracy (Pluto Press, 2009)